May 2019 Market Commentary

Toronto Real Estate Board announced that Greater Toronto Area REALTORS® reported 9,989 transactions through TREB’s MLS® System in May 2019.* While this result represented a substantial increase of 18.9 per cent over the 15-year low in May 2018, it should be noted that the result was still below the average for month of May sales for the previous ten years, which stands at almost 10,300.

The year-over-year uptick in sales experienced so far in the second quarter of 2019 reflects spring polling results from Ipsos (undertaken on behalf of TREB) suggesting that the share of likely home buyers in the Greater Toronto Area has edged upwards since the fall.

After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors.

However, sales activity continues to be below the longer term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales.

The number of new listings entered into TREB’s MLS® System in May 2019 was up only slightly compared to May 2018, increasing by 0.8 per cent to 19,386. Year-over-year growth in new listings was far outstripped by year-over-year growth in sales. This means that market conditions continued to tighten in favour of sellers.

The MLS® Home Price Index (HPI) Composite benchmark price was up by 3.1 per cent on a year-over-basis. The average selling price for all home types combined was up by a similar 3.6 per cent to $838,540. Price growth was driven by the condominium apartment and townhouse market segments. “We are experiencing annual rates of price growth that are largely sustainable right now in the GTA – above the rate of inflation, but in the single digits. If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate. This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market.

Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs,” said Jason Mercer, TREB’s Chief Market Analyst.

(Source TREB)

HAMILTON AVERAGE HOME PRICES UP 0.9%

Home sales rose 10.9 per cent in Hamilton in May compared to the same month last year, according to the Realtors Association of Hamilton-Burlington (RAHB). Meanwhile, the average home price rose 0.9 per cent.

The association, which covers Hamilton, Burlington, Haldimand County and Niagara North, says 1,344 homes were sold last month through the Multiple Listing Service.

That's up 9.6 per cent from April and 30.2 per cent from March.

Apartment-style homes and townhouses saw the biggest jump in May, up 20 per cent and 21.8 per cent respectively year-over-year. Meanwhile, detached, single-family homes — which are more expensive — saw a 6.3 per cent sales increase. Although activity is up, prices haven't risen astronomically.

The average home price was $593,702 in May, up 0.9 per cent from the same month in 2018. The average townhouse price tag went up 3.7 per cent, condo prices rose 8.3 per cent, and single-family homes rose 0.5 per cent, the association said.

In Hamilton, the average May sale price was $546,779, up $29,333 from the year before.

Burlington — which had the most expensive average home — was the only region where May prices dropped this year, down to $733,410 from a $774,758 average in 2018. 

We're seeing the more expensive markets have had more of a balancing out and more affordable areas, like Hamilton centre and Hamilton east, are having more activity, because people are choosing to live there.

The growth comes after last year's cooler market, which saw 13.7 per cent fewer sales than in 2017. 

Housing sales now seem more in line with previous years, before the frenzy of 2016 and 2017.

Hamilton house prices were rising at a rate more than double the national average in the first quarter of 2019, faster then any Canadian market.

(Source CBC)

Stella McCollum